Lithium mining enterprise performance surged up to 45 times

According to the third quarterly report of Zangge Mining, the company achieved operating income of RMB 5.713 billion in the first three quarters of this year, a year-on-year increase of 172.11%; net profit was RMB 4.166 billion, a year-on-year increase of 404.89%.

In the first three quarters of this year, China Mining Resources achieved operating income of RMB 5.489 billion, a year-on-year increase of 293.51%; net profit of RMB 2.051 billion, a year-on-year increase of 578.53%. Among them, the net profit in the third quarter was 729 million RMB, a year-on-year increase of 464.13%.

The company with the highest growth announced that in the first three quarters, the company achieved operating income of 1.682 billion RMB, a year-on-year increase of 208.65%; net profit was 1.255 billion RMB, a year-on-year increase of 4533.03%. Among them, the net profit in the third quarter was 679 million RMB, a year-on-year increase of 4611.39%.

Lithium carbonate prices rise as the main reason

As for the reasons for the substantial increase in performance, most companies said that they were mainly affected by the high prosperity of the industry and the rising price of lithium carbonate. For example, Rongjie Co., Ltd. said that the high growth in performance is due to the continuous improvement of the new energy industry, the strong market demand for lithium battery materials and lithium battery equipment, and the increase in the price of lithium salt products, which has significantly improved the company’s profitability year-on-year.

Zangge Mining mentioned in its previously released performance statement: During the reporting period, the global new energy vehicle industry continued to develop rapidly, and the demand for raw materials for power batteries was strong. At the same time, thanks to the rise in the volume and price of lithium carbonate products, the operating income and profit of the secondary subsidiary Zangge Lithium Industry increased significantly compared with the same period of the previous year.

As the main raw material for power batteries, the price of lithium salt has been rising since last year. According to data, most of the quotations for lithium battery materials rose on October 24. Lithium carbonate (99.5% battery grade/made in China) rose by 3,000 RMB/ton to 541,000 RMB/ton, and the highest price was 550,000 RMB/ton, setting a new record high again.

Most institutions and industry insiders are optimistic about the future trend of lithium salt prices. According to industry insiders, the rising trend of lithium salt prices in 2022 is certain, the supply and demand pattern from 2023 to 2024 will be difficult to reverse, and the price rise of lithium salts will continue to exceed market expectations. The performance of lithium mining companies in the fourth quarter of this year is still expected to maintain a growth trend.

A recent report pointed out that the market’s expectations for excess supply of lithium salts are relatively consistent. The stock prices of lithium salt companies have been reflected in advance and have fallen sharply. The lithium sector still shows obvious characteristics of weak reality and strong expectations. It is judged that the price of lithium carbonate continued to rise in the fourth quarter. As the weather in the north turns cold, the output of lithium salt in the salt lakes in Qinghai will decrease after November.

At the end of this year and at the beginning of next year, there is a stocking demand before the new cathode material production capacity is put into production. In addition, the impulse of new energy vehicles at the end of the year is expected to expand the demand for lithium salt at the end of the year. It is expected that the price of lithium salt will remain strong.

Companies are expanding production to increase capacity

With the increasing demand for downstream lithium salts, lithium battery companies are also actively expanding production and increasing production capacity.

Recently, One od the lithium salt enterprises Yongxing Materials announced that, Yongxing New Energy Department, a wholly-owned subsidiary of the company, learned that the battery-grade lithium carbonate project with an annual output of 20,000 tons has completed equipment installation and commissioning, material input testing, etc., and have all the approval procedures required for production, the production capacity has reached the design requirements, to achieve full production.

It is understood that after the project with an annual output of 20,000 tons of battery-grade lithium carbonate is put into production, Yongxing New Energy has an annual production capacity of 30,000 tons of battery-grade lithium carbonate. Through the scale effect, the company’s core technology advantages, raw material cost advantages and internal management advantages in mica lithium extraction will be better utilized, the company’s profitability and core competitiveness will be enhanced, and the company’s position in the lithium salt industry will be enhanced.

China Mining Resources once disclosed in the announcement that the new 25,000-ton battery-grade lithium hydroxide and battery-grade lithium carbonate production lines will reach production in November 2021; The reconstruction and expansion of the 6,000-ton lithium fluoride production line has been completed; the reconstruction and expansion of the 180,000-ton ore/year production line at the Tanco mine in Canada will be completed in the third quarter of this year;

The raw material end of the lithium salt production line has gradually used lithium concentrate supplied by its own mines. It is worth noting that in order to further expand the source of mineral supply of new energy raw materials for lithium batteries, China Mining Resources recently announced that its wholly-owned subsidiary Tanco signed a “Memorandum of Understanding” with the Canadian listed company Grid.

The two parties aim to actively discuss the feasibility of cooperative development of the Donner Lake Lithium Mine in Canada and reach a consensus on potential cooperation. According to the memorandum, Grid will provide Tanco with samples of spodumene ore from the Donner Lake Lithium Mine in Burnick Lake, Manitoba, and Tanco will conduct beneficiation tests and issue a technical report.

The announcement shows that Grid acquired the Donner Lake lithium project from Tanco in 2016. According to the data, the main pegmatite body of Donner Lake Lithium Mine and the northwest pegmatite body have discovered a total of 3.5 million tons of lithium mineral resources, with an average Li2O grade of 1.28%. With the participation of more companies, the competition for lithium resources will become more and more fierce in the future, and only companies with real strength can stand out in the market!